ACH Security Measures

Banker Insights ACH Security Measures

Small and medium sized business (SMB) owners often want to utilize Automated Clearing House (ACH) services. Now that you have system and process security measures in place, there are additional tips for ACH payments.  This payment channel is a well-established and completely reliable alternative to maintaining check stock with paper-based processes.  It is secure and allows for various settlement timelines. 

Additional protections that your business should consider implementing are:

  • Require a signed agreement, as well as voided check stub when adding a new employee or vendor.  For vendor payments, obtain an ACH Letter of Authorization from their financial institution.
  • Include language in agreement for permission to pull back payment should one be sent erroneously.
  • Assign dollar value limits for each user based on an average value of monthly payments. This can be adjusted and is meant as an additional safety measure.
  • Consider Dual Authorization as an extra security measure.  These authorizations should be tied to internal documentation making authorization limits very clear to each user.
  • Build payment templates and do not allow changes without a Dual Authorization.  
  • Batch payment templates by type submit in one file and build process to confirm all items before sending.
  • Use prenotifications features if available.  Although old school, they are effective.  It is a process that allows you to send a notice to receiving account to confirm that account name, account number and transit routing number of the account to be used.  This process does require some processing days upfront but will provide an extra step in the security process for your business.
  • Consider using ACH Block or ACH Positive Pay Services as the final step.  Reconciliation procedures for SMBs are often at month-end and, at this point, the ability to return item or draw funds will be lost.

Companies today have even more incentive to take precautions to avoid fraud.  Although you may not think it will happen to you, it can be crippling.  Whether using ACH or another payment method, it is important to establish security measures to better protect your business.


About The Author:

Sherri Wolfe is a Senior Vice President in Treasury Management for Dallas Capital Bank.  She specializes in treasury products and processes to support small and medium sized business.  Sherri has 20 years of banking experience, is a Certified Treasury Professional (CTP) and stays involved with her family owned business.  Sherri lives in Dallas with her husband Jim, enjoys keeping up with their seven children and still gets a good laugh from a dad joke. If you want to learn more about treasury services and mitigating fraud risk, please reach Sherri at

Dallas Capital Bank is a locally owned and managed commercial bank founded to provide Dallas entrepreneurs, business owners and professionals with access to a higher level of banking service. At Dallas Capital Bank we are How Dallas Does Business.